EVERETT, Wash. ( TheStreet) -- One day after surging on heavy volume, Frontier Financial ( FTBK) shares retraced some of those gains Wednesday on fears the deal with SP Acquisition Holdings ( DSP) will not close. Frontier shares were lately down 19 cents, or 12.3%, to $1.35. Share volume Wednesday topped 3.8 million, well above the 50-day average daily volume of 515,000 shares, according to the Nasdaq's Web site. SP Acquisition, a New York-based asset-acquisition company sponsored in part by Steel Partners, said in July it would buy Frontier for about $24 million in stock and warrants. In a regulatory filing Wednesday, SP Acquisition said that Frontier shareholders would receive an implied consideration of roughly 52 cents a share "resulting in an implied discount of approximately $1.02 per share of Frontier common stock." SP Acquisition warrants, which had traded near 40 cents last week, had fallen to 13 cents Wednesday, an indication traders believe there is a low probability of a deal being completed. The filing also said Frontier expects that its Tier 1 leverage capital ratio will drop below 4% as of Sept. 30, which would mean the bank would be considered "undercapitalized" by federal regulatory guidelines. In March, Frontier said it signed a Cease and Desist Order with the Federal Deposit Insurance Corp. and State of Washington Department of Financial Institutions. Under the agreement, Frontier agreed to achieve and maintain a Tier 1 capital level of 10% of its total assets. The bank's Tier 1 capital ratio at year end 2008 was 8.53%.